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Iran’s Economy Shrink by 6% Because of US Sanctions: IMF

The Trump administration is due to formally end the waivers for some of Iran's top crude purchasers, including China, India, Japan, Turkey and South Korea

US sanctions, iran's economy
Secretary of State Mike Pompeo speaks during a news conference on Monday, April 22, 2019, at the Department of State in Washington. VOA

The International Monetary Fund is forecasting Iran’s economy to shrink by 6% this year as it faces pressure from U.S. sanctions.

In a report released Monday, the IMF said its estimates for Iran, which include the potential for inflation to top 40%, predate a U.S. decision to end waivers that have allowed some Iranian oil buyers to continue making their purchases despite new sanctions that went into effect last year.

The Trump administration is due to formally end the waivers on Thursday for some of Iran’s top crude purchasers, including China, India, Japan, Turkey and South Korea.

The United States says it wants to deprive Iran of $50 billion in annual oil revenues to pressure it to end its nuclear and missile programs. The White House says it is working with top oil exporters Saudi Arabia and the United Arab Emirates to ensure an adequate world oil supply.

Turkey and China have attacked the U.S. action, but it is not clear whether they will continue to buy Iranian oil.

Iranian Foreign Minister Mohammad Javad Zarif said an interview broadcast on the U.S. cable show Fox News Sunday accused the United States of trying to “bring Iran to its knees” and overthrow its government by seeking to thwart its international oil trade.

iran's economy, US sanctions
FILE – Iran’s Foreign Minister Mohammad Javad Zarif gestures during a press conference in Tehran, Feb. 13, 2019. VOA

He said U.S. officials are “wrong in their analysis. They are wrong in their hope and illusions.”

Zarif said the fact that Trump withdrew the United States from the 2015 international agreement to curtail Iran’s nuclear program “would not put the U.S. in the good list of law-abiding nations.” Iran state media reported that Zarif told Iranian reporters in New York that Tehran’s withdrawal from the pact is one of “many options” it is considering in the wake of the U.S. end to the waivers on sanctions for countries buying oil from Iran.

Zarif said a team of Israeli Prime Minister Benjamin Netanyahu, U.S. national security adviser John Bolton, and leaders in Saudi Arabia and the United Arab Emirates is trying to push U.S. President Donald Trump “into a confrontation he doesn’t want.”

“They have tried to bring the U.S. into a war,” Zarif said, with the goal, “at least,” of Iranian regime change.

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Bolton, appearing on the same Fox News program, said the U.S. goal is not regime change, but a change in behavior, specifically an end to Iran’s nuclear weapons program and ballistic missile testing.

“The Iranian people deserve a better government,” Bolton said. He called Zarif’s accusations “completely ridiculous, an effort to sow disinformation.” (VOA)

Next Story

Huawei to Invest More in South Korea Amid US Sanctions: Report

Huawei said the plan to set up a R&D centre in South Korea was still on the table. "There are still things that we have to consider. But we have a strong will to establish a R&D centre here," Meng said

People walk past a Huawei retail store in Beijing, June 30, 2019. VOA

Chinese telecom behemoth Huawei Technologies has decided to beef up business in South Korea by increasing the purchase of parts for network equipment and smartphones, amid continued US sanctions.

Karl Song Kai, head of Huawei’s global media and communications, said the company also planned to increase investment in South Korea, but he didn’t specify the numbers. “In 2020, we’ll buy more Korean-made products and invest more in South Korea,” he said.

The Chinese tech firm, the top telecom gear maker and the second-largest mobile phone manufacturer in the world, said its product purchases in South Korea were expected to surpass 13 trillion won ($11.1 billion) this year, slightly up from last year’s $10.6 billion, yonhap news agency reported on Friday.

“As (the) US (is) getting closed-minded, I believe this is an opportunity for other countries such as South Korea,” Song said.

The US has been prodding South Korea and other partner countries to stop using Huawei products on security grounds amid trade tensions with China.

The US also imposed a ban on Huawei that prevents the Chinese firm from buying American-made parts, such as chips and software. But such sanctions have made Huawei turn its eyes to non-American vendors, including South Korea.

FILE – A man uses his smartphone outside of a shop selling Huawei products at a shopping mall in Beijing, May 29, 2019. VOA

“Huawei is trying to establish its own global supply chain, and South Korea plays an important role,” he said.

Shawn Meng, who heads the Korean unit of Huawei, said South Korea was an important customer and partner for Huawei. “South Korean customers are one of the toughest who demand high-quality standards,” Meng said. “This makes us produce better products and develop advanced technologies,” Meng said.

Huawei, which established its Korean unit in 2007, has been trying to expand presence in South Korea in recent years in line with the boom in 5G networks.

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Along with South Korea’s No. 3 carrier LG Uplus Corp, Huawei said it has established 18,000 5G base stations across the country. The firm, however, has yet to reach a 5G equipment deal with SK Telecom or KT Corp, the country’s top two mobile carriers.

The company also opened its 5G lab in South Korea in May, which allows local companies and other business partners to test their technologies and equipment in 5G networks to facilitate collaboration.

Huawei said the plan to set up a R&D centre in South Korea was still on the table. “There are still things that we have to consider. But we have a strong will to establish a R&D centre here,” Meng said. (IANS)